Top Movers on Earnings: Morgan Stanley, Alcoa and Honeywell

Top Movers on Earnings: Morgan Stanley, Alcoa and Honeywell

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Morgan Stanley grew 1.5% as the US investment bank has released convincing results for its third quarter, helped in particular by bond trading. The net profit of the firm stood at 2.17 billion dollars, against 1.8 billion consensus. It shows a growth of 3% year-on-year. Revenues rose 2% to about $10 billion, compared to 9.6 billion consensus on Wall Street. It is also the highest level of activity of the investment bank in more than a decade. James Gorman, boss of the firm, greets this performance, demonstrating the ‘stability of the model’.

Alcoa added 5.9% after the American giant of aluminum announced quarterly losses and a review of its capacities and its assets. The group lamented a net loss of $221 million for the quarter, or $1.19 per share, compared to a deficit of $6 million a year earlier. Excluding items, the third quarter deficit would have been $82 million, 44 cents per share, against a profit of $154 million a year ago. Revenues slumped to $2.6 billion from $3.4 billion a year earlier. The consensus was for the 42 cents loss with $2.6 billion in revenue. The group discussed a portfolio review aimed at redefining its strategic priorities and reducing costs in order to return to sustained profitability.

Restructuring costs will be primarily in the fourth quarter and then in the first fiscal quarter of the following year. The group targets $60 million in annual savings. Proposed asset disposals are expected to generate $500 million to $1 billion of net revenues.

Honeywell was up 2.4% after it delivered a rather satisfactory performance in the third quarter, boosting its annual profit estimates. The sales guidance is however somewhat disappointing. The US industrial group, active in the aerospace, construction and defense, announced a net profit down to $1.62 billion and $2.23 per share, against $2.34 billion and $3.11 billion per share a year ago. Excluding non-recurring items, adjusted earnings per share increased 9% to $2.08, while the consensus was close to $2. Revenues fell 16% year-over-year to $9.09 billion. The consensus was a notch higher at 9.12 billion. The group raises its guidance 2019 adjusted earnings per share between $8.10 and $8.15.

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I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.

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